Tuesday, January 22, 2013

The Hamilton Township Council and Board of Education appear ready to put in place permanent policy changes that will save local taxpayers millions of dollars in the costs of insurance and professional services, local activists say.

On Feb. 5, the council will introduce ordinances to require the township to select its insurers and service providers through an open and competitive process.

Steve Cook, a leader of the citizen reform campaign, said his group had reviewed the ordinances, and their authors “seem to have done a great job.”

“We’re very excited about what they’re proposing, and we’re cautiously optimistic that everything will be passed and signed quickly by Mayor (Kelly) Yaede,” Cook said.

The school board, for its part, is planning to adopt a similar system for obtaining insurance by making it part of its official purchasing manual, he said. This action, like the proposed township ordinance, will require future officeholders to follow the specified procedures.

It’s happening because of what Cook calls “a perfect storm” of circumstances that mobilized public opinion behind the changes.

One was the trial and conviction of then-Mayor John Bencivengo last year in a scheme to steer a school board insurance contract to a favored company, and the guilty plea of a Bencivengo aide and former school board member in a related case.

Another was the leadership of the citizen reformers who, even before the mayor’s indictment, had urged the two local governing bodies to introduce transparency and competition into public contracting.

“We were prepared to fight for this from door to door with petitions to explain the potential savings,” said Cook. Instead, he added, the mayor’s indictment and trial provided “a forum, through media outlets, to make our case with the people.”

“It was a teachable moment,” he said. “Elected officials not only couldn’t ignore it, but they felt compelled to react to it. It wasn’t just because some of us stood up, but because there were other citizens in the audience, especially at school board meetings, who were very passionate about the need for them to take immediate action.”

Cook, who is executive director of the Arc Mercer, got his grounding in governmental reform as chief of staff to retired state Sen. Peter Inverso (R-Hamilton). With fellow activist Connie Silakoski, he had urged the council and school board to adopt a model ordinance and resolution on insurance purchases drafted by the Citizens Campaign, a statewide organization dedicated to helping grass-roots taxpayer movements curtail waste and fight corruption in their local governments.

These require the local agency to select its insurance brokers on a competitive, flat-fee basis to work for the buyer, with no commission from the insurance companies they recommend. Once a broker is chosen, the legislation requires that he or she obtain at least three different quotes for the agency, including, for health insurance, a quote from the State Health Benefits Plan.

At the outset, the school board declined to adopt the Citizens Campaign resolution. However, it did adopt a short-term reform, using an independent broker, that saved the school district more than a million dollars in health insurance premiums, for an average property-tax saving of $100 per homeowner. The policy that will become part of the board’s purchasing manual now “contains the lion’s share of what we’ve asked for,” Cook said.

“There may be one or two things we have to ask them to refine,” he said. “We hope to have our review complete in the next few days.”

Board President Jeff Hewitson and Superintendent James Parla “have been completely cooperative to this point,” he added.

When both governing bodies have enacted the planned reforms, Cook said, the township could save $2 million or more on brokerage fees just for insurance alone: health, workmen’s compensation, property and casualty.

Beyond that, he added, “when you competitively bid the actual insurance coverage, and the brokers aren’t working off a commission, the amount we could save could be in the millions. We don’t know, because it hasn’t been done that way before.